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MANAGEMENT AGREEMENT FOR EMPLOYEES PENSION FUND PLAN , j J MANAGEMENT AGREEMENT s~ THIS AGREEMENT is made and entered into as of the 31 day of~, 200~, by and between the CITY OF CLEARWATER EMPLOYEE'S PENSION FUND (the "Named Fiduciary") and PUTNAM FIDUCIARY TRUST COMPANY (the "Manager"). WITNESSETH: WHEREAS The City of Clearwater, has established and continues to maintain the The City of Clearwater Employee's Pension Fund Plan (the "Plan") and a related trust (hereinafter the "Trust") for the purpose of providing retirement benefits to certain eligible employees as described in the Plan; and WHEREAS, the Trust provides for the appointment by the Named Fiduciary of an "investment manager", as that term is defined in Section 3(38) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"); and WHEREAS, the Named Fiduciary desires that the Manager serve as investment manager with respect to certain of the assets held by the Trust. NOW, THEREFORE, in consideration of the mutual agreements herein contained, it is covenanted and agreed as follows: l. Appointment of Investment Manager. Effective on the }Lyday of tf,T60ER, 200Q, and until this appointment is terminated pursuant to Paragraph 13 hereof, the Named Fiduciary, pursuant to the power and authority granted by the Trust and Section 402(c)(3) of ERISA for and on behalf of the Trust, hereby appoints the Manager as investment manager with respect to those assets of the Trust which are specifically allocated by the Named Fiduciary for management hereunder. (Such assets, together with all investments and reinvestments of, and all income earned by, such assets, are hereinafter collectively referred to as the "Account"). The Manager hereby acknowledges and accepts such appointment. 2. Representation by the Named Fiduciary. The Named Fiduciary hereby represents and confirms that the Plan is a qualified plan within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), that the Trust is a tax-exempt trust pursuant to Section 50l(a) of the Code, that the Trust expressly permits the commingling of its assets with assets of other trusts through the medium of collective or pooled investment trusts as described in Section 408(b)(8) of ERISA, and that the Trust expressly provides that to the extent of its equitable share in such collective investment trust, said collective investment trust shall be deemed a part of the Trust. 10/26/98 all /, '. ~ . . . 2,-0:) (6 '; , 3. (Y:) ) J Discretionary Authority. (a) Subject to the investment objectives and restnctlOns set forth in Exhibit A attached hereto and made a part hereof, as the same may be amended from time to time, the Named Fiduciary hereby expressly grants to the Manager full and complete discretion and authority with respect to the management of the Account, including, without implied limitation, authority to purchase, sell, exchange, convert, trade and generally to deal in securities and other property in the Account for the account and at the risk of, and in the name of, the Trust and generally to perform any other act necessary to enable the Manager to carry out its obligations under this Agreement. Not withstanding the foregoing, the Named Fiduciary may direct the Manager in Exhibit A to invest all or any part of tbe Account in (i) any of the collective investment funds which the Manager maintains for tax~qualified employee benefit plans (including, without limitation, anyone or more of the "Funds" established pursuant to the Declaration of Trust, dated February 28, 1991, as amended) or (ii) shares of any mutual investment company, trust or fund (including mutual funds which are sponsored, underwritten or managed by affIliates of the Manager). Any entity so authorized is referred to herein as a Fund, except as otherwise required by applicable law or regulations, the Manager shall not be obligated to give prior notice of, or to consult with the Named Fiduciary or any other person regarding, the exercise of its authority hereunder. (b) The Manager shall have absolute authority and discretion to place orders for securities transactions on behalf of the Account with such brokers or dealers as the Manager shall select in its sole discretion. The Manager shall not be responsible for any acts or omissions by any brokers or dealers, provided that the Manager is not negligent in the selection of such broker or dealer. (c) In selecting brokers or dealers to execute transactions on behalf of the Plan or any Fund in which the Plan is invested, the Manager will seek the best overall terms available. In assessing the best overall terms available for any transaction, the Manager will consider factors it deems relevant, including, but not limited to, the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer and the reasonableness of the commission, if any, for the specific transaction and on a continuing basis. In selecting brokers or dealers to execute a particular transaction, and in evaluating the best overall terms available, the Manager is authorized to consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended) provided to the Manager and/or other accounts over which the Manager or its affiliates exercise investment discretion. Nothing in this paragraph shall be deemed to prohibit the Manager from paying an amount of commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker, or dealer would have charged for effecting that transaction, if the Manager determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker, or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Plan, any fund and/or accounts over which the Manager or its affiliates exercise investment discretion. 2 I I (d) The Manager is hereby authorized to vote upon any stock or other secuntles of any corporation at any time in the Account or otherwise consent, to or request any action on the part of such corporation, and to participate in reorganizations, recapitalizations, consolidations, mergers and similar transactions with respect to such stocks or other securities; and generally to exercise any of the powers of an owner with respect to stocks or other securities in the Account which the Manager deems to be for the best interests of the Plan to exercise. The Manager shall be under no obligation to provide proxy or any related material in connection with any such stock or other security to the trustee(s) of the Plan or to any other party. 4. Custody of Securities. The securities and other assets in the Account have been deposited with the Manager and the Manager shall be responsible for the custody of such securities and other assets; provided, however, that the Manager may transfer custody of part or all of the assets in the Account to an agent or agents selected by the Manager in its sole discretion to act as custodian or subcustodian on its behalf. 5. Fee Schedule. For services under this Agreement, the Manager shall be entitled to receive a fee in accordance with the Schedule of Charges attached hereto. Such fee shall be billed quarterly in arrears as of the last day of each calendar quarter and shall be payable within (30) days after receipt of such bill, which shall be computed upon the average of the value of the assets in the Account as of the last day of each month in such calendar quarter. If the services to be rendered hereunder shall commence other than on the first day of a calendar quarter or terminate other than on the last day of a calendar quarter, then the above fee shall be fairly and equitably prorated. 6. Investment Objectives and Restrictions. The investment objectives and restrictions for the Account are set forth in Exhibit A attached hereto. The Manager shall manage the Account in accordance with such investment objectives and restrictions and shall incur no liability or other responsibility on account of any damage or loss which may result from its acting in accordance with said objectives and restrictions. 7. Reports. The Manager will provide the Named Fiduciary with an appraisal of the Account as ,of the last day of each calendar quarter on which the New York Stock Exchange is open, and shall furnish such additional reports and information as may reasonably be requested by the Named Fiduciary. The Named Fiduciary hereby agrees to furnish the Manager with such information, authorizations, and documentation as the Manager may from time to time require to enable it to carry out its obligations under this Agreement. 8. Liabilitv. The Manager shall be responsible only for the management of the Account in accordance with the investment objectives and other limitations and guidelines, attached hereto as the same may be amended from time to time. The Manager shall have no responsibility whatsoever and shall incur no liability on account of (a) the selection of such investment objectives and other limitations and guidelines, including the determination that such objectives, limitations and guidelines are consistent with the requirements of ERISA as applied to the Trust, (b) the management of any other assets of the Trust, or (c) the administration of the Plan. Unless the Manager has not acted prudently or has otherwise violated the provisions of ERISA or other applicable law, the 3 ~ ,. 1 I Manager shall not be subject to any liability to the Trust, the Named Fiduciary, or to any other person, firm or organization, for any act Of omission of itself or of any other person, firm or organization in the course of, or connected with, its obligations under this Agreement. The Manager shall have no obligation to seek any material non-public (" inside") information about any issuer of securities, and shall not purchase or sell, or recommend for purchase or sale, the securities of any issuer for the Account on the basis of any such information as may come into its possession. 9. Services to Other Clients. It is understood that the Manager and its affiliates perform investment advisory services for various clients (including investment companies), and that one or more such affiliates may provide non-discretionary investment advice to the Manager. The Named Fiduciary agrees that the Manager may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Account, so long as it is the Manager's policy, to the extent practical, to allocate investment opportunities to the Account over a period of time on a fair and equitable basis relative to other clients. It is understood that the Manager shall not have any obligation to purchase or sell, or to recommend for purchase or sale, for the Account any security which its principals, affiliates or employees may purchase or sell for its or their own accounts or for the account of any other clients, if in the opinion of the Manager such transaction or investment appears unsuitable, impractical or undesirable for the Account. 10. Acknowledl!;ment and Representation by the Manajl;er. The Manager hereby acknowledges that it is a fiduciary with respect to the Plan within the meaning of Section 3(21)(A) of ERISA and represents and warrants that it is a bank within the meaning of Section 202(a)(2) of the Investment Advisers Act of 1940. 11. Authority. Each of the parties to this Agreement represents that it is duly authorized and empowered to execute, deliver and perform this Agreement, that none of such execution, delivery or performance does or will conflict with or violate any provision of law, rule or regulation, contract, deed of trust, or other instrument to which it is a party or to which any of its property is subject, and that this Agreement is a valid and binding obligation enforceable in accordance with its terms against it. 12. Assignability. Neither party to this Agreement may assign this Agreement without first obtaining the written consent of the other party hereto. 13. Termination. This Agreement may be terminated by either party hereto upon (30) days' written notice to the other party. Upon any such termination, the Manager shall deliver all the assets in the Account to the trustee(s) of the Trust. Such termination shall be without payment of any penalty and without liability of either party to the other, except that the Trust shall remain liable for any accrued but unpaid compensation due to the Manager. 14. Notices. Unless otherwise permitted herein, all notices, instructions and advice with respect to the security transactions or any other matters contemplated by this Agreement shall be deemed given when received in writing by the Manager at One Post Office Square, Boston, Massachusetts 02109 or when received in writing by the Named Fiduciary 4 {I:> J I at 100 South Myrtle Avenue, Clearwater Florida, 34616-5520_or at such other address or addresses as shall be specified. The Manager and the Named Fiduciary each may rely upon any notice from the other. 15. Governing Law. This Agreement shall be construed, administered and enforced in accordance with applicable federal law and, to the extent permitted by such law, by the laws of the Commonwealth of Massachusetts. IN WITNESS WHEREOF, the parties hereto have executed this document as of the day aud year set forth above. CITYOFCLEARWA~~LoIDDA ~// Brian Aungst Mayor-Commissioner Bill Horn Interim City Manager Approved as to form: Jane an tstant City Attorney Cynthia E. Goudeau City Clerk A',"[ "' to form: BOARD OF TRUSTEES OF THE EMPLOYEES PENSION FUND ,OF THE CITY OF CLEARWATER, FLORIDA ,<~&,>v ---- ATTEST: Pamela K. Akin City .Attorney. E. Goude1l:i\~._ City ,Clerk FIDUCIARY TRUST COMPANY' By: Oti vL/t~. Jo~raUl Senior Vice President 5 rP I I SCHEDULE OF CHARGES TO MANAGEMENT AGREEMENT The quarterly management fee is based on the value of the Account computed in accordance with Section 5 at the following annual rate: Total Assets Annual Fee Initial $25 million Next $35 million Next $40 million Over $100 million .75 of 1% .60 of 1% .45 of 1% .30 of 1% $75,000 minimum annual fee applicable 6 I I EXHIBIT A TO MANAGEMENT AGREEMENT The Named Fiduciary directs the Manager to invest the Account in the Fund(s) described below: Putnam International Trust Investment Objective The Fund seeks above-average total return in international equity markets consistent with avoiding undue risk. Above-average total return is performance which exceeds the performance of the relevant universes of international investment managers and the relevant market indices, as from time to time determined by the Manager in consultation with investors in the Fund. Investment P alieies Under normal market conditions, the Fund pursues its objectives through (a) diversification across several foreign markets, without undue exposure to anyone market. (b) investments in undervalued stocks, using the Manager's proprietary valuation approach. The Fund may purchase equity securities, securities convertible into equity securities, and debt securities. The Fund may also hold cash and money market instruments. The Fund may use derivative instruments for hedging currency and market risks. Derivative instruments may also be used as an alternative to direct investment in the securities markets, provided that the appropriate amount of cash is retained to prevent leveraging the portfolio. The Account may hold all or part of its asset in short-term debt securities, bonds or preferred stocks of U.S. or non-U.s. issuers, repurchase agreements with U.S. banks or U.S. dollars when such investments are believed to be warranted as a defensive measure. 7 tJ> I I EXHIBIT B AUTHORIZATION has authorized each of Client Name the individuals listed below to provide instructions concernIng its investment management account with Putnam. Until Putnam receives written notice to the contrary, Putnam is authorized to honor instructions in writing or by telephone, fax or other electronic means from any person identifying himself or herself as: Authorized Individuals (Please type or print) Client Name Signed: Dated: 8 I I ,Important Features of Putnam International Trust (the "Fund") (a fund within the Putnam Fiduciary Trust Company Group Trust ("PFTC")) Investment Powers and General Statement of Investment Poliev with respeet to the Fund. Investment Objective The Fund seeks above-average total return in international equity markets consistent with avoiding undue risk. Above-average total return is performance which exceeds the performance of the relevant universes of international investment managers and the relevant market indices, as from time to time determined by the Manager in consultation with investors in the Fund. Investment Policies Under normal market conditions, the Fund pursues its objectives through (a) diversification across several foreign markets, without undue exposure to anyone market. (b) investments in unde;"alued stocks, using the Manager's proprietary valuation approach. The Fund may purchase equity securities, securities convertible into equity securities, and debt securities. The Fund may also hold cash and money market instruments. The Fund may use derivative instruments for hedging currency and market risks. Derivative instruments may also be used as an alternative to direct investment in the securities markets, provided that the appropriate amount of cash is retained to prevent leveraging the portfolio. The Fund may hold all or part of its assets in short-term debt securities, bonds or preferred stocks of U.S. or non-U.S. issuers, repurchase agreements with U.S. banks or U.S. dollars when such investments are believed to be warranted as a defensive measure. The Allocation of Income, Profits and Losses. Each Unit shall represent an undivided proportionate interest in all assets and liabilities of the Fund, and all income, profits, and losses shall be allocated to all Units equally. (Paragraph 1 of Article IV of the Declaration of Trust of the PITe Investments Funds for Pension and Profit Sharing Trust.) I I The Terms and Conditions Governine; the Admission or Withdrawal of Partieipation in the Fund. A Qualified Trust may, as of auy Valuatiou Date, with the consent of the Trustee, deposit assets in the trust and in such proportions among the Funds as the Investing Fiduciary of such Qualified Trust shall determine. The Trustee shall be fully protected in following the determination of said Investing Fiduciary as to the amounts and proportions of the assets of any deposit to be placed in each of the Funds. Only money and such other assets as are permissible investments for the Fund, and acceptable to the Trustee, may be deposited in such Fund. Assets other than money deposited in a Fund shall be valued at their fair market value as of the Valuation Date on which the deposit is made. The Trustee shall credit to the account of each Participating Trust which makes a deposit in the Fund, that number of Units which the deposit will purchase at the then value of each Unit. The Investing Fiduciary of a Participating Trust may, as of any Valuation Date, withdraw any number of Units from the Fund. Notice of withdrawal must be received by the Trustee no later than three (3) husiness days prior to the Valuation Date, but the Trustee may waive or reduce such notice requirement in any case. Upon the withdrawal of Units from the Fund, the Trustee shall distribute to the Participating Trust making such withdrawal a sum arrived at by multiplying the number of Units withdrawn by the value of each Unit on the Valuation Date. Distribution shall be made in cash or in kind or partly in cash and partly in kind, as the Trustee in its sole discretion shall determine; provided, however, that as of any Valuation Date all distributions shall be made on the same basis. The value of any asset other than cash which is transferred to a Fund shall be deemed to be the value as determined in Paragraph 3 of Article IV of the Declaration of Trust. When the Trustee receives notice that a Participating Trust has ceased to be a Qualified Trust as defined in Article I, Paragraph 2 of the Declaration of Trust, then all Units allocated to such Participating Trust shall automatically be withdrawn upon the next Valuation Date which is more than fifteen (15) days subsequent to the date the Trustee receives such notice. (Article V of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) 2 f!<J I I The words "Qualified Trust" mean a trust created under an employees' pension, profit sharing or stock bonus plan (a) which is qualified within the meaning of Section 401 and exempt from tax under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code") or other applicable laws or statutes of the United States of America, whether now' existing or hereafter enacted; (b) which is permitted by existing or future rulings of the United States Treasury Department to pool its funds in a group trust; (c) whicb is administered under an agreement which autborizes part or all of the assets of the trust to be commingled for investment purposes with the assets of other such trusts by investing such assets in a collective investment trust and which adopts each sucb investment trust as a part of the plan; and (d) of which PUTNAM FIDUCIARY TRUST COMPANY is acting as trustee, co-trustee, custodian, investment manager, or agent for the trustee or trustees. If such trust covers self-employed individuals within the meaning of section 401(c)(i) of the code then such trust will be permitted to invest in the Fund only to the extent permitted by the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended. The words "Qualified Trust" also mean any plan described in Section 8I8(a)(6) of the Code (i) which satisfies the requirements of Section 3(a)(2) of the Securities Act of 1933, as amended and (ii) of which PUTNAM FIDUCIARY TRUST COMPANY is acting as trustee, co-trustee, custodian, investment manager, or agent for the trustee or trustees. (Paragraph 2 of Article I of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trust.) The Anditinl!: of Accounts with respcct to the Fund. The Trustee shall at least once each year cause an independent certified public accountant to audit the Fund. A copy' of the report of such audit shall be furnished, or a notice given that a copy of such report is available and will be furnished without charge upon request, to each person entitled to receive a copy of the annual account of the Trustee hereunder, and shall also be furnished subject to a reasonable charge to any other person on request. The reasonable expense of such audit shall be charged to the Fund. The cost of printing, publication, and distribution of the report shall be borne by the Trustee. (Paragraph 3 of Article VI of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) Annually, within ninety (90) days after the close of the Fund's fiscal year, the Trustee shall furnish a written account of the operation of the Fund for the preceding fiscal year to each Investing Fiduciary or, if such Investing Fiduciary is itself, to the person or persons to whom such Investing Fiduciary accounts. (Paragraph 4 of Article VI of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) The Basis and Method of Valuatinl!: Assets in the Fund, settinl!: forth Specific Criteria for each Tvpe of Asset. As of each Valuation Date, the Trustee shall determine the then fair value of each Unit of the Fund by dividing the then fair market value of the Fund by the number of Units of the Fund then allocated to Participating Trusts. 3 /14 I I The assets of the Trust shall be valued as follows: securities for which market quotations are readily available shall be valued at market value, which shall be determined using the last reported sale price or, if no sales are reported, the last reported bid price. The fair value of all other securities and assets shall be determined in good faith by the Trustee. At the discretion of the Trustee, certain securities and investments shall be stated at fair value on the basis of valuations furnished by a pricing service, approved by the Trustee, which determines valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders. The Trustee may conclusively rely upon any regularly published reports of sale prices, bid prices, and over-the-counter quotations for the values of any listed or unlisted securities. The reasonable and equitable decision of the Trustee regarding whether a method of valuation fairly indicates market value, and the selection of a pricing service, shall be conclusive and binding upon all persons. (Paragraph 3 of Article IV of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) The Minimum Frequeucv for Valuation of Assets of the Fund. The words "Valuation Date" when applied to the Fund mean the last business day of each calendar month and such other additional business days as the Trustee may from time to time designate. (Paragraph 8 of Article I of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) The Period Followin.!!: each sueh Valuation Date durin.!!: which the Valuatiou mav be made. Each valuation shall be completed within such period following each Valuation Date as may be specified by applicable laws or regulations, and if no such date is so specified such valuation shall be made within ten (10) business days following each Valuation Date. (Paragraph 3 of Article IV of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trust.) The Basis upon which the Fund mav be Terminated. The Trustee may, on any Valuation Date, without advance notice to any person, terminate the Fund, and thereupon the value of each Unit in the Fund shall be determined and there shall be distributed to each Participating Trust in cash or in kind or partly in cash and partly in kind a sum arrived at by multiplying the number of Units in the account of each Participating Trust by the value of each Unit on said Valuation Date. (Paragraph 2 of Article VII of the Declaration of Trust of the PFTC Investment Funds for Pension and Profit Sharing Trusts.) 4 pf' " ~ I Putnam International Trust Each year Putnam Fiduciary Trust Company directly files an annual report of the collective trust(s) in which your Plan invests with the Department of Labor pursuant to Regulation section 2520.103-9. In order to do this filing, we need the following information from you. Plan Sponsor Name: City of Clearwater, Florida Employer Name (if different from above): Plan Sponsor Tax ID Number: 59-6000289 Plan Name: Ci ty of Clearwater Employees' Pension Fund Plan Number: Once we have filed the report, we will send you a certificate of flling to assist you in your preparation of your Plan's 5500 flling. " I I SCHEDULE OF CHARGES TO MANAGEMENT AGREEMENT The quarterly management fee is based on the value of the Account computed in accordance with Section 5 at the following annual rate: Total Assets Annual Fee Initial $250 million Next $250 million Next $500 million Over $1,000 million .45 of 1% .34 of 1% .30 of 1% .25 of 1%